Enterprise

Business hibernation: Why it’s your best bet

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One old man once told me that in nature you can learn more immortal lessons and life skills than any teacher can teach you if you are a keen observer and a good student.

One such lesson is how various creatures and plants survive seasonal harsh environments such as winter and summer.

During such periods trees shed leaves to remain light and avoid loss of water by evaporation or survival nutrients to the baggage of leaves. Animals eat enough at the onset of winter and head to the burrows, caves and dense forest where they hibernate until conditions improve.

During hibernation animals heart rate, body temperature and breathing rate slow way down. This helps them conserve energy, which means they can stay dormant instead of going out in the cold to look for food which is hard to get and end up freezing or starving.

Such seasonal harsh conditions are becoming common in the market place and some businesses have to learn how to survive, else they will be phased out.

Some businesses have to adopt a form of hibernation as a survival strategy in the face of imminent existential threats brought about by various local and global market storms.

At the moment, nearly everyone in business is no longer at ease. The writing is on the wall: the rising cost of nearly everything that is exchanged for money, frequent shortage of basic commodities, depreciation of our shilling and uncertainties in the global markets signal a harsh season ahead.

In this form of hibernation, you essentially reduce your activities to what is needed to survive and see good times ahead. This does not mean closing business, sacking employees or not servicing customers.

If you do this, you may lose out in the long term. When things improve, you will have lost your key employees, customers and market share.

The right thing is to cut cost to the bone. The guiding principle for hibernating your business is to lower your heartbeat but not to let it stop. Hibernating animals know very well that if the heat stops beating they are done.

Likewise, in business, turn off everything not essential but leave all contacts, contracts, networks, and as many resources as possible intact for a return to normal when the harsh season ends

When going slow you must ensure customers and suppliers don’t interpret it to mean you are sinking. Otherwise, they will run away from you. It is important for them to know that you are scaling down due to prevailing economic situation but planning to resume normalcy as soon as the situation changes.

As a way of shedding extra baggage on your cash flow consider rescheduling your loans, and of course halt nonessential borrowing. Spend only on what is necessary and try various innovative and creative ways of achieving the same results for less.

As you hibernate your business don’t close your eyes. Scout ways of responding to customer needs that may emerge as a result of harsh environment which they are also part of.

Enterprises are founded on the foundation of addressing needs in the society and therefore the more the challenges the more the opportunities to come up with solutions.

Mr Kiunga is a business trainer and the author of The Art of Entrepreneurship: Strategies to Succeed in a Competitive Market. [email protected]